Financial Review

Copycat complaints
The advertising industry watchdog has received hundreds of complaints about copycat websites that charge for services that are available for free. A number of websites that offer assistance in updating a driving licence or completing a tax return are found during online searches, often topping the list of possible sites.

The Advertising Standards Auth-ority said it had received 700 complaints about 25 websites in the past year. These sites are legal and many do make it clear that they are providing a service that the user will have to pay for. But some of the sites look very similar to official ones and often people do not read through the disclaimers or the terms and conditions.

More people go self-employed
Britain is in the grip of an entrepreneurial boom fuelled by a rise in what has been dubbed ‘silver self-employment’. People aged 50 and over accounted for more than 70% of the increase in the number of self-employed over the past five years, according to the Office for National Statistics.

Since 2008, the year the recession began, an extra 613,000 people have joined the self-employment ranks. More than half of people aged 50 and over are self-employed. The figures show a fall of 148,000 in the number of full-time workers, offset by a rise of 251,000 part-timers. Of that big rise in self-employed entrepreneurs, 37% are aged 50-64 and 35% are 65 and over. There are now 4.5 million self-employed people in Britain, the most since records began.

Potholes are a cash black hole
Fixing potholes in roads would cost more than £12 billion, with the problem made worse by the record rainfall and flooding over the winter. Those conditions alone have increased the cost of getting roads back into a reasonable condition by £1.5bn. Compensation claims for car damage and injury caused by potholed or badly maintained roads now cost taxpayers £32m a year.

It would take 12 years to clear the road repair backlog in England and Wales and 14 years in London, says the Annual Local Authority Road Maintenance (ALARM) survey, carried out by the Asphalt Industry Alliance.

Top earners’ tax cut raises tax take
The amount of tax paid by mega-rich high earners has soared since the Chancellor, George Osborne, cut the top rate of tax from 50 to 45 pence. New figures from HM Revenue & Customs show the total income tax collected on earnings over £150,000 rose from £40bn last year to £49bn this year.

Former Conservative cabinet minister, John Redwood, who produced the figures, said they would be a “shock to many of the conventional pundits” who criticised the rate cut. The top 1% of earners now earn 13% of the total UK income but pay 28% of the total income tax. The top 5% earn one quarter of the income but pay around half the total income tax.

Directory enquiries run up phone bills
Directory enquiry firm 118 118 has been fined £80,000 for failing to display its charges clearly in advertisements. The company – famous for its long-running adverts featuring runners with retro haircuts and moustaches – was told to improve its pricing information after claims that it was hard for customers to find information about charges. Calls to the service cost £3.58 for the first minute and £1.99 for each subsequent minute, charged by the second, plus network charges, but customers could not easily find out this pricing information.

The ruling comes just weeks after BT was fined £225,000 for similar failings on its 118 500 directory enquiries service. The BT service carries a connection charge of 59 pence for the first minute, then charges £2.39 a minute. But regulators found that callers often had to listen to rambling automated messages before their request was dealt with, meaning they started incurring the higher rate. Staff also often asked callers if they wanted to be put through to the number they requested, rather than dial it themselves, which meant they paid £2.39 a minute for the call to the number.

Tribunal rules shaken up
New rules aimed at reducing the number of employment tribunals have come into force. Staff wanting to bring a case of unfair dismissal or discrimination now have to first notify the Advisory, Conciliation and Arbitration Service (ACAS) to see if the dispute can be resolved.
Another change sees employers facing fines if the tribunal reveals poor practices. Ministers said the changes would help avoid stress, delays and excessive costs. Previous changes included the introduction last year of fees for workers taking their employers to a tribunal. This led to an almost 80% fall in applications.

Under the new rules, which came in with the 2014-15 tax year, staff or employers will be required to consult ACAS before having access to a full tribunal. Another change will mean that if an employer loses a case and is shown to have especially poor workplace practices, they could be fined up to £5,000 on top of any award to an employee.

Debt advice could cost you dear
People ringing a government-backed helpline for advice on debt and benefits are being charged up to 41 pence a minute for the service. The Citizens Advice Bureau helpline, which gives advice on debt, employment, legal issues and housing, uses 0844 and 0845 numbers. According to Ofcom, calls from mobile phones to 0844 numbers are charged up to 41 pence a minute. Landline users are charged up to 13 pence.

The Citizens Advice website says charges from 0845 numbers are around 3 pence per minute from a BT landline, but it concedes that those from mobiles may cost considerably more. Those wishing to report other organisations for using high-rate numbers must call their 084 helpline.

Last year, government departments were ordered to stop using premium phone lines. Cabinet Office guidance is that it is “inappropriate for callers to pay substantial charges for accessing core public services, particularly for vulnerable and low income groups”.

NHS ripped off by law firm’s bills
A law firm has been accused of sending the NHS legal bills of up to 80 times the value of compensation claims awarded to patients. Rapid Response Solicitors allegedly won £2,500 for a patient scalded by a hot drink – then billed the health service £58,000, more than 20 times the settlement. In one case the company reportedly submitted a bill of £83,000 after winning a client a pay-out of just £1,000.

Now NHS managers have launched a crackdown on excessive legal bills, challenging them in court and freeing up money to be spent on patient care. In the case of the hot drink pay-out, the costs – which included a reported £800-an-hour bill for legal advisers – were slashed to £5,610.

Financial advisers still mislead customers
Financial advisers are routinely misleading their customers about charges, more than a year after a crackdown was enforced to weed out rogue firms. Describing the failures as unacceptable, the City watchdog said more than seven in 10 firms failed to properly explain the cost of advice or how the charges work. More than three in 10 failed to explain that they are not independent and can only sell certain types of investments from a limited number of product providers.

The Financial Conduct Authority described the findings as a wake-up call for advisers. The failings come more than a year after the watchdog banned commission payments to prevent future mis-selling scandals. The FCA said the failings were worse at private banks and wealth managers, which specialise in wealthier investors.

Energy companies spark complaints
Complaint levels about energy companies soared in the first three months of the year, as the sector remained in the political firing line. Complaints more than trebled compared with the same period in 2013. There were over 10,600 complaints forwarded to the Energy Ombudsman, with billing the biggest source of concern.

Last month, regulator Ofgem announced a competition inquiry into the sector. Other causes of cases being taken to the ombudsman included not receiving bills and billing charges. Customer service was also highlighted by the ombudsman as a major issue.

IMF predicts UK will top G7 growth
The International Monetary Fund (IMF) says the UK economy will be the fastest-growing in the G7 developed nations this year. It says the UK will grow 2.9% in 2014, up from a January estimate of 2.4%. This will be followed by growth of 2.5% in 2015. Overall, the IMF says the global economy strengthened at the end of 2013. It forecasts global growth of 3.6% this year and 3.9% in 2015. For the UK, this is another substantial upgrade to the IMF’s assessment of the outlook.

Impressive as this is, the rest of the world continues to be dwarfed by China. The IMF says its economic growth will be 7.5% for 2014 and 7.3% next year – a year on year reduction because the Chinese authorities are expected to tighten credit terms.

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